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aap is an internationally-active medical technology company in developing, manufacturing and marketing implants and biomaterials for trauma and joint reconstruction. Its product portfolio includes implants for fracture healing and joint replacement, bone cements, bone graft substitutes and antibiotical carriers.
In addition to its Berlin headquarters the company has subsidiaries in Dieburg and Obernburg near Frankfurt am Main, Dusseldorf as well as Nijmegen in The Netherlands. 
Since May 16, 2003 aap Implantate AG has been listed in the Prime Standard segment on the Frankfurt Stock Exchange

URL: http://www.aap.de


Press Release dated February 28, 2017
aap: Sales in Q4/2016 at EUR 2.4 million and in FY/2016 at EUR 11.2 million; sales growth in established markets and EBITDA improvement planned for FY/2017
Challenging FY/2016 with progress in strategic implementation – Transformation into pure player in trauma completed
Forecast for FY/2017: Sales between EUR 10.0 million and EUR 13.0 million and EBITDA between EUR -6.5 million and EUR -4.5 million; dynamic development expected from the second half of the year
Growth drivers of planned sales development are established markets, such as North America, the DACH region, and further European countries
EBITDA improvement shall be achieved by raising gross margin from sales in higher margin markets while at the same time reducing costs   

Sales development in 2016
aap Implantate AG (“aap”) achieved sales of EUR 2.4 million in the continued operation in the fourth quarter of 2016 (Q4/2015: EUR 2.4 million) according to preliminary figures. As such, the company generated sales of EUR 11.2 million in the continued operation in financial year 2016 as a whole (FY/2015: EUR 12.3 million), which were therefore within the guidance of EUR 11.0 million to EUR 12.1 million as published in December 2016.
Q4/2016 Sales

In EUR million    Q4/2016    Q4/2015    Change on year
Trauma    2.0    2.0    N/C
Other    0.4    0.4    N/C
Sales continued operation    2.4    2.4    N/C

FY/2016 Sales In EUR million     FY/2016     FY/2015     Change on year
Trauma    9.6    10.8    -11%
Other    1.6    1.5    +9%
Sales continued operation    11.2    12.3    -9%
                
Sales discontinued operation    4.2*    15.7    < -100%
Group sales    15.4*    28.0    -45%
*Includes aap Biomaterials GmbH business from 01/01/2016 to 05/11/2016.
aap is looking back on a challenging financial year 2016 in which the financial targets could not be met but nevertheless good progress was made with the implementation of the strategy. In the last year, the company sold its subsidiary aap Biomaterials GmbH and its remaining stake of 33% in aap Joints GmbH, which marked the final steps on the way to a pure player in trauma. In its efforts to focus on established markets, aap also managed to increase the share of sales attributable to North America and Europe together year on year, by around 50% to EUR 6.8 million in financial year 2016 (FY/2015: EUR 4.5 million). Overall, the realized pleasing sales increases in North America and Europe could however not compensate the missing sales contributions from China. Furthermore, delays in the sales development in various markets led to a sales shift in financial year 2017.
Outlook for 2017
aap intends to return to the growth track in financial year 2017. In line with the strategic focus in particular established markets such as North America, the DACH region and further European countries shall serve as drivers of the sales increase. At the same time sales development in BRICS and SMIT countries shall be stabilized. Overall, the Management Board anticipates a moderate development over the first six months and a more dynamic growth in particular in the second half of the year.
Following its recent divestments, the sales structure of aap will change in financial year 2017. In the past financial year the company generated total sales of around EUR 1.6 million from its product business with aap Joints GmbH (EUR 1.0 million) and from distribution services for the sold former subsidiary aap Biomaterials GmbH (EUR 0.6 million). These sales will not be repeated in 2017.
In light of these changes the Management Board expects sales of EUR 10.0 million to EUR 13.0 million for this financial year. For the first quarter of 2017, the Management Board anticipates that sales will be in a range between EUR 1.8 million and EUR 2.8 million.
aap intends to improve EBITDA in financial year 2017 by raising gross margin while at the same time reducing costs. aap plans to increase gross margin, in particular by growing sales in higher margin markets, such as North America or the DACH region. aap also plans to close a technology deal (e.g. co-development agreement, licensing, granting of distribution rights etc.) in financial year 2017 for its LOQTEQ® and/or silver coating technology.
In terms of costs, firstly, the personnel measures already implemented in financial year 2016 and the actions taken to improve operational efficiency will produce their effect during the current financial year. Secondly, the company is planning to further optimize its cost structure with the aim of realizing additional saving effects.
In contrast, to sustainably improve the entire quality management systemand against the background of the higher requirements of the new EU Medical Devices Regulation, aap has launched the comprehensive quality management program “Quality First”. It will result in one-time costs of around EUR 0.5 million in the current financial year.
Another fact worth mentioning is that aap generated not insignificant earnings in financial year 2016 from central services provided for aap Joints GmbH and from transitional services for aap Biomaterials GmbH, which were reported under other operating income and will not be repeated this year.
Based on the planned measures and developments as described above, the Management Board expects an EBITDA in financial year 2017 of EUR -6.5 million to EUR -4.5 million. For the first quarter of 2017, the Management Board anticipates that the EBITDA will be in a range between EUR -2.3 million and EUR -1.7 million.
Value-based innovations 2017
Building on the indication coverage level of more than 90% that has already been achieved in the treatment of major bone fractures, aap is planning to further complete the LOQTEQ® portfolio in financial year 2017. Its product development activities will focus particularly on polyaxial fixation technology as well as foot and ankle.
In light of the increased regulatory requirements and based on the recent exchange with the regulatory authorities aap now assumes that the performance of a clinical study will be a necessary condition for the granting of a CE and FDA approval for the silver coating technology. As the coordination process with the regulatory authorities about the extent of the clinical study is still running, aap will inform about the related approach as well as the corresponding timetable and the required resources in a separate release in the second quarter of 2017.
Management Agenda 2017
The Management Board of aap has specified its targets for the current financial year as a Management Agenda in four strategic and operational action areas.
Management Agenda Targets for 2017

Accelerating Value-Based Innovations
LOQTEQ®: Completion of LOQTEQ® portfolio with a focus on polyaxial fixation technology as well as foot and ankle
Silver coating technology – Application on LOQTEQ®: Decisive steps regarding CE and FDA approval with focus on clinical study
Silver coating technology – Development projects with global companies: Initiation of joint product development and product approval projects

Enhancing Market Access
Established countries: Focus on DACH, Western Europe and North America as key markets
Emerging Countries: Stabilization of sales development in BRICS and SMIT states
Global partnerships: Distribution networks and licensing deals with global orthopaedic companies

Optimizing Operational Efficiency
Quality First: Comprehensive program to improve the entire quality management system
Production efficiency: Reduction of manufacturing costs and increase of ability to provide timely deliveries
Working capital: Optimization of working capital management with a higher inventory turnover and a reduction of the figure DSO (days sales outstanding)

Realization of Financial Targets
Sales and EBITDA: Sales between EUR 10.0 million and EUR 13.0 million, and EBITDA between EUR -6.5 million and EUR -4.5 million
Costs: Further optimization of the cost structure with the aim of realizing additional saving effects
Innovations: Maintenance of a freshness index of at least 20%

The Management Board is confident with the consequent implementation of the measures derived from the strategy to lead aap back on the growth track and to unlock the inherent value of its innovative product and technology base.
aap plans to publish its consolidated annual financial report 2016 on 31 March 2017.
This release contains forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments
For further information, please contact:
aap Implantate AG
Lorenzweg 5
12099 Berlin
Fabian Franke
Manager Investor Relations
Tel.: +49 (0)30 / 750 19 134
Fax: +49 (0)30 / 750 19 290
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